Getting Personal With Your Health Insurance Exchange Questions

The final countdown: It's time to figure out how insurance through the health exchanges will work for you.

Katherine Streeter for NPR

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Originally published on September 16, 2013 10:15 am

With the launch of new health insurance exchanges just about two weeks away, many of the questions in this month's mailbag focused less on the big picture and more on exactly how the law will operate for individuals.

We can't answer every question we get. But here is a sampling of questions that were really popular, or that would apply to a lot of people.

One of those questions came from Melanie Wilson of Kittery, Maine. "I'm self-employed and my yearly income varies widely from year to year," she writes. She wants to know if the subsidies available for health insurance premiums will be based on gross or net income. "Since I'm self-employed I have a lot of deductions, so my gross looks good but at the end of the year the net can be pretty minimal."

The subsidies, which are available to those earning between 100 percent and 400 percent of the federal poverty level, are based on your modified adjusted gross income, or MAGI. That includes things like wages and interest, less deductions like tuition and alimony, and additional payroll taxes paid by the self-employed. You'll be asked to estimate what your income will be for next year; if you're wrong, you'll have to reconcile with the IRS come tax time the following April.

Francis Sheridan of Anchorage, Alaska, is curious about young people who opt to pay the tax penalty rather than purchase health insurance, which is an option under the law. "My question to them is when some of you, which will happen, are seriously injured or incur other health care, who's going to pay your health care bills?"

If you don't have insurance, you'll get a bill, just like now. If you can't pay, the hospital or other health care provider will still try to collect from you, although there are some provisions of the law aimed at discouraging some of the most aggressive collection tactics that have been used in the past. If they don't collect, the health care provider would have to eat the cost. That's why hospitals were so anxious to have most people covered by insurance, so they could stop having to provide so much free care to people who couldn't pay.

Steve Foree of Spring Creek, Nev., says he and his wife are both retired, but they're not old enough yet for Medicare. "We still have health care coverage through our previous employers," he writes, "but since we're not still employed by them, can we take advantage of the state health exchanges after January 1st to shop for better rates and coverages?"

The answer to this question actually turns out to be a little bit tricky. For those lucky enough to have health coverage provided by a former employer, yes, that generally qualifies as coverage for purposes of fulfilling the requirement that you have insurance. Then there's the question of whether it bars you from going to the exchange and shopping for a better deal. Generally if you have employer coverage you can't do that.

But it turns out that retiree coverage is sort of a special category. According to a Treasury Department spokeswoman, yes, you can drop your retiree coverage and go shop on the exchanges. And if your income is low enough you can be eligible for a subsidy. But you can make that move only during open enrollment season. So you need to be ready to look starting Oct. 1.

We had two questions about when you can buy insurance. One came from Andras Simon of Celebration, Fla. He wants to know what happens if he buys insurance in his home state and then moves to another state during the course of the year. "Can I buy new insurance outside the enroll period? Or do I have to wait until the next one?"

Anne Heller from Santa Monica, Calif., is confused about the law's requirement that insurance be available to people with pre-existing health conditions. Since she's healthy now and the insurance would cost more than the penalty for not having it, "can I just wait to sign up at that point, without there being any discrimination for the pre-existing condition?"

To answer Heller's question first, no. You can't just sign up when you're sick and facing big medical bills. Otherwise that's what everyone would do. The exchanges under the Affordable Care Act have been designed pretty much the same way most employer insurance plans are: There's an open season every year when you can buy or change plans, but with only a few exceptions, that's the only time you can buy or change plans. This year's open season is a lengthy one — it runs from Oct. 1 to March 31, 2014. In future years it will begin in October and end in December of each year.

That means if you decide to go without insurance and pay the fine and you get sick, it's on you until the next open season.

When it comes to Simon's question, yes, moving to a different state is one of several exceptions that allow you to buy or change plans outside the normal open-enrollment periods. So is getting married or divorced, giving birth to or adopting a child, or losing your job-based insurance. Any of those life events triggers a special 60-day enrollment period where you can change or buy health insurance on an exchange. Otherwise, you'll have to wait until the next open enrollment.

Finally, Jon Taylor of Portland, Ore., was one of many listeners who wants to know why we at NPR sometimes refer to the health law as "Obamacare." Wrote Taylor, "In using this term, I believe NPR is falling into a trap set by the Tea Party, conservatives and the health care industry."

Around that time, many NPR reporters and hosts began using the phrase to describe the law, although usually not on first reference. It certainly no longer carries the purely negative inferences it used to, as NPR's ombudsman recently acknowledged in a column.

Do you have a question about the health law? Send it to MorningEditon@NPR.org. We may use it in a future on-air or online segment.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, HOST:

And now, it's time again to take your questions about the Affordable Care Act. We've been inviting your questions for some weeks about this law, since the main parts of it takes effect in just a few weeks.

STEVE INSKEEP, HOST:

NPR health policy correspondent Julie Rovner is with us once again. Hi, Julie.

JULIE ROVNER, BYLINE: Hey, Steve.

GREENE: Glad you're back on the program. So here's our first question. It comes from Francis Sheridan, of Anchorage, Alaska, who has a question about young people who opt to pay this tax penalty instead of just buy health insurance. Which is an option - you can just pay a penalty. Let's listen.

FRANCIS SHERIDAN: My question to them is: When some of you, which will happen, are seriously injured or incur other health care costs, who's going to pay your bills.

ROVNER: Well, it's pretty much like now. If you don't have insurance, you'll still get billed. If you can't pay, the hospital will still try to collect from you. But eventually, it may have to eat that cost. That's why hospitals were so anxious to have most people covered by insurance, so they would stop having to provide so much free care to people who just couldn't pay.

INSKEEP: OK. Our next question comes from Andras Simon of Celebration, Florida. And here's the question: What if I buy insurance on the exchange itself - employed in Florida and then a few months later I have to move to North Carolina or some other state? And what if the insurance I chose is not portable, it's not transferable to North Carolina? Julie, what happens then?

ROVNER: If you move you can buy new insurance outside the open enrollment period. Basically, the exchanges are going to work a lot like the insurance most people have at work, where mostly you can only change plans during the open enrollment period.

But there are exceptions. Obviously, moving is one exception. So is getting married or divorced, or giving birth to or adopting a child, or losing your job-based insurance. Any of those life events triggers a special 60-day enrollment period where you can change or buy health insurance on an exchange. Otherwise, though, you do have to wait until the next open enrollment period.

INSKEEP: Well, I wonder if that has some bearing on this next letter that has come to our attention here. This time it's from Anne Heller, of Santa Monica, California, who says she's confused about this law's requirement that insurance be available to people with preexisting health conditions. She says OK, I'm healthy now, and the insurance would cost me a lot - more than just paying the penalty for not having it. Can I just wait until I am sick and sign up for insurance then? That's the substance of her question.

ROVNER: That's right. And the answer is no. Otherwise, that's what everybody would do, since obviously the penalty for not having insurance is less than the cost of insurance itself. As we just talked about earlier, except in specific situations, like if you lose your job and your insurance, you can only enroll or change plans during these open enrollment seasons.

Now the first open season, since the system is just starting out, is a very long one. It begins October 1st, it runs through next March 31st.

INSKEEP: Mm-hmm.

ROVNER: In future years though, it's going to start in October and end in early December. So if you want to buy insurance on one of these exchanges, you're going to have to watch the calendar. And if you decide to take your chances and you do get sick, then you're going to have to wait to sign up until the next open enrollment session.

INSKEEP: Or if you're just one of those people who procrastinates or gets really busy, you're going to have a problem if you get sick later on in the year.

ROVNER: That's correct.

INSKEEP: OK. Let's go to one more question here. It comes from Steve Foree of Spring Creek, Nevada. He and his wife are both retired but they are not yet old enough for Medicare, which is really common.

STEVE FOREE: We still have health care coverage through our previous employers but since we're not currently employed by them, can we take advantage of the state health exchanges after January 1st to shop for better rates and coverages?

INSKEEP: Can they?

ROVNER: Well, the answer to this question actually turned out to be a little bit tricky. Now for those lucky enough to have health coverage provided by a former employer, yes, that does generally qualify as coverage for purposes of fulfilling the requirement that you have insurance. But then there's the question of whether it bars you from going to the exchange and shopping for a better deal. Generally, if you have employer coverage you can't do that.

But it turns out that retiree coverage is sort of a special category. So yes, you can drop your retiree coverage and go shop on the exchange. And if your income is low enough, you can be eligible for a subsidy - but only during the open seasons that we've been talking about. So you need to be ready to look come October 1st.

INSKEEP: Julie, thanks very much.

ROVNER: Thanks very much.

GREENE: That's NPR health policy correspondent Julie Rovner in our studios here. Now Julie got far more questions than she can deal with in the time we have on the air. So she has answered some more of your questions at our website. You can look for yours at npr.org, or learn from the ones that are there. And if you have a question for a future segment, you can send it to MORNING EDITION@npr.org.